The Sydney-based property group and the Atlanta-headquartered global real estate investment advisory manager, Invesco Real Estate, has entered into a strategic open-ended partnership.
The agreement is to develop and hold an initial portfolio of three land lease community assets in a newly established Stockland Land Lease Partnership (SLLP1) which is expected to generate approximately $1.1 billion in gross development revenue.
The partnership, established on the initial basis of Stockland’s 50.1% interest, and Invesco Real Estate’s flagship pan-Asian core strategy 49.9% interest, will include 1,190 homes across three Stockland Halcyon land lease communities at The Gables in the Hills district, about 50km northwest of Sydney’s CBD; Aura 2 (Coves) in Bells Creek on Queensland's Sunshine Coast; and Redland Bay in Brisbane's southern bayside; with an opportunity for SLLP1 to acquire the land lease community at Providence, south of Ipswich, Qld.
“With the execution of SLLP1, we are pleased to welcome another globally recognised institutional partner to our 8,800 home land lease communities pipeline," Stockland Chief Investment Officer, Justin Louis (pictured below), said.
“Our land lease business offers high-quality, commercially attractive investment prospects for third-party investor partners, such as Invesco. The SLLP1 partnership will enable us to continue to scale our development pipeline and grow our LLC operating platform to enhance long-term sustainable business growth.”
The deal effectively sees Stockland selling a 50% stake in the three assets but the bigger prize is securing a deep-pocketed backer who is keen on unlocking a $1 billion pipeline for the venture. The open-ended nature of the partnership allows Stockland to capitalise on future demand.
Ian Schilling (pictured below), Head of Asia Pacific Core Funds for Invesco Real Estate, added: “This partnership with Stockland, one of the most established players in the segment, is an ideal platform to expand exposure to this attractive and growing real estate sector. Land Lease Communities are a high-conviction investment theme for us given the housing shortage and ageing population in Australia. This partnership is a key component in us continuing to grow our diversified portfolio of high-quality assets that are underpinned by robust market fundamentals and strong income and capital growth.”
Stockland is positioning for a step change in production rates in the land lease communities sector with up to 12 new communities expected to launch during FY24 (subject to relevant approvals and planning).
SLLP1 is Stockland’s second partnership in the land lease communities sector, following its successful establishment of the Stockland Residential Rental Partnership (SRRP) with Mitsubishi Estate Asia in February 2022.
Jarden acted as exclusive financial adviser to Stockland in relation to the transaction.